SOMALIA'S Government has raised concerns with the Australian Stock Exchange over a mysterious deal ‎involving a small Perth company that claims it has secured the exclusive mineral and oil rights over a large ‎slice of the war-torn African country.‎
In a letter to the ASX, Somali Prime Minister Ali Mohamed Gedi offers to co-operate in any investigation into ‎the company's claims.‎
The letter, a copy of which has been obtained by The Age, said the deal with the regional government in the ‎eastern Somali state of Puntland was invalid because only the country's transitional federal government had ‎the power to negotiate the sale of mineral and oil rights.‎
The letter was sent on October 6, a day after Range Resources Ltd announced that it had entered into a ‎conditional heads of agreement with an overseas company, Consort Private Ltd, to buy 50.1 per cent of the ‎sole and exclusive rights to all mineral and oil exploration and development in Puntland. "We understand ‎that this event, if not stopped on time, will have an impact on Range Resources Ltd and the market of the ‎Australian Stock Exchange and we ask you as a matter of urgency to inform your market of this event," the ‎letter says.‎
Shares in Range Resources, which plans to fund the deal through a $3.45 million rights issue, were heavily ‎traded after the announcement, and jumped about 30 per cent to more than 4¢. They closed on Friday at ‎‎3.8¢.‎
Consort Private, which is believed to be registered in the Maldives and operates through a London law firm, ‎signed a contract with the Puntland government on August 30 at the Hilton Hotel in Dubai.‎
The deal between Puntland and Consort has been the focus of intense public debate in Somalia, where it ‎increased tensions between the regional and federal governments.‎
Civil war between rival clans have raged in Somalia for more than a decade, with a federal government being ‎elected only last year. On August 28, just two days before the contract was signed, Somalia's prime minister ‎warned foreign companies and investors in a press release to stop trying to make deals for mining rights with ‎regional governments such as Puntland.‎
‎"Any violation against this statement will result in negative consequences and the external and/or internal ‎culprits will take the responsibilities on their shoulders," it said.‎
After announcing the deal between Consort Private and Range Resources on October 5, Range's Melbourne-‎based executive director Jim Marinis said he knew little about Consort Private and could not explain why it ‎had chosen to approach a small and virtually unknown company such as Range Resources, which has a ‎market capitalisation of just $20 million.‎
However The Age has learnt that Range Resource's new executive chairman, Michael Povey, travelled to ‎Somalia in April with Terry Donnelly, the Perth businessman who put together the deal between Consort ‎Private and the Puntland government.‎
Also on the trip, which was arranged through Mr Donnelly's charity Kids In Need Inc, were Perth consultant ‎geologist Malcolm MacLeod and lawyer Anthony Black, who is a director of Consort Private.‎
Mr Povey, a mining engineer, joined Range Resources on August 26 — four days before the contract between ‎the Puntland government and Consort was signed — and was given 1,125,000 share options in the ‎company.‎
Mr Marinis said Mr Povey had been appointed as Range Resource's executive chairman because of his ‎knowledge of Somalia and not for any links he might have with those behind the Consort Private deal. "He ‎was not the go-between," Mr Marinis said.‎
He also said Mr Povey had no financial interest in Consort Private. "Absolutely not," he said. "There's nothing ‎to hide on that one."‎
Mr Marinis denied there were any problems with the legality of the deal, despite Mr Ali's letter to the ASX.‎
He said Range Resources had gained separate written assurances from Somalia's transitional federal ‎government that it would not interfere. On October 10 the company wrote to the ASX saying the federal ‎government had provided "written approval with regards to the validity, operation and effect of the Puntland ‎agreement".‎
Mr Marinis said the government of Puntland was democratically elected and independent and had the power ‎to negotiate and sign the contract with Consort Private. An ASX spokesman confirmed it had received the ‎letter from Mr Ali.‎
‎"The company was aware of the claims in it too," he said. "We understand they sought to address those in ‎the announcement of October 10."‎
There is confusion surrounding the roles Terry Donnelly, Michael Povey, Malcolm MacLeod and Anthony ‎Black played in putting together the deal that saw the exclusive rights over Somali minerals and oil given to ‎Consort Private and then sold to Range Resources.‎
Under the terms of the agreement, Range Resources will pay Consort Private $US2.5 million ($A3.3 million) ‎and make a further 17 monthly payments of $US200,000. Consort will also be given 85 million Range ‎shares and 85 million Range options.‎
According to Range Resources, Mr Donnelly worked as a consultant to Consort, but Mr Donnelly denies this, ‎saying he received no financial reward for putting the deal together.‎
Mr Donnelly says his only interest was in helping the people of Somalia through his WA registered Kids In ‎Need charity. He told The Age his memory of exact dates and events was not good because of a recent ‎illness.‎
Documents posted on Range Resource's website show Mr Black and Mr Donnelly were present at the signing ‎of the contract between the Puntland government and Consort Private in Dubai. During the signing ceremony ‎Puntland's state president praised the two of them, pointing out that Mr Donnelly "introduced us to Consort".‎
Mr MacLeod confirmed he had visited Somalia in April as a consultant to examine "certain amounts of data" ‎but denied any direct involvement with Consort Private or Range Resources, and refused to comment on the ‎deal.‎